By Reena Jana, contributor
FORTUNE -- Despite global economic turmoil, the Chinese luxury market is still expanding at a dizzying rate -- by 16% in 2010 according to McKinsey. Not surprisingly, Shangpin -- a new Beijing-based, members-only e-commerce site -- is growing dramatically too.
The company's name refers to the Chinese characters for "fashion" ("shang" is a shortened version of "shi shang," the full character for "fashion") and "taste" ("pin"). Considering the nuances of the second character, the name also translates as "quality." Shangpin launched in July 2010, and offers top European labels, such as Gucci, to Chinese consumers during limited-time online sales. In the first four months of operation, the start-up had signed up 1 million members and reached $1.56 million in sales, according to the company. Growth has been startlingly quick. Shangpin started with 3 employees a year ago; now it has more than 300. In November 2010, it got $10 million in Series B funding by Morning Side Ventures, and this July, Chenwei Capital put in a stunning $50 million in Series C funding.
Despite all of the early investor and consumer excitement surrounding Shangpin, the site's concept might seem very familiar to Web-savvy fashionistas in the United States, Europe and Japan, where stylish shoppers can order and receive designer fashions from the sites Gilt Groupe and Vente-Privee. Shangpin is also planning to offer a section of its site that offers full-price, just-off-the-runway goods as well, more parallel to the e-commerce site Net-a-Porter, which is owned by luxury conglomerate Richemont. What sets Shangpin apart, though, is of course its affluent, ambitious Chinese clientele. Its intimate understanding of those customers could become the envy of established luxury brands around the world.
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